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During this webcast we'll explore how supply chain execution convergence (SCEC) helps break down the barriers resulting from disparate, fragmented technology solutions allowing you to more effectively serve customers, adapt to changing business cycles, and save both money and resources.

Gas tax blues

By Jeff Berman, Group News Editor
February 26, 2013

There are only so many ways one can say that raising the federal gasoline tax is a good idea in order to, you know, largely pay for the maintenance of the roads we all use pretty much on a daily basis.

If you read this magazine or Web site regularly, you will observe that we the federal gasoline tax has not increased from its current levels of 23.4 cents for diesel and 18.4 cents per gallon of gasoline since 1994.

As LM has reported myriad times in the past, by most accounts, the common refrain for not raising the tax in nearly 17 years appears to be “a lack of political will.”

While raising that point is cumbersome, what is even more cumbersome is that our political “leaders” (a play on words to be sure) think that their constituents actually still have the patience for their interminable political posturing.

Anyhow, at a time when our nation’s back is up against the wall, this time due to matters of budget sequestration, the gasoline tax and how to finance myriad transportation infrastructure-related initiatives remains a delicate subject at best.

In interviews with just about every shipper, carrier, lobbyist or other type of transportation stakeholder, the overarching theme—regardless of political party affiliation—has been the same: raise the tax in order to help pay for our roads and transportation infrastructure.

Think Washington has gotten the message on this yet? Yeah, me neither.

I have cited this quote by outgoing Department of Transportation Secretary Ray LaHood many times but I feel the need to do so again. This is from a question I asked him just more than two years ago about it here will be a fuel increase of any kind coming down the road anytime soon.

You know the answer. Here is what he said:

“The President has indicated on any number of occasions that he is opposed to raising the gas tax in a very, very lousy economy, with unemployment still over 9 percent. Many people are hurting, and some cannot even afford to buy a gallon of gas, let alone have the gas tax raised. We are not recommending that, and we are not suggesting that. That is not something the President is for, so we will not be making any proposals to raise the gas tax.”

This leads to the next point, which is gasoline prices are moving up again in a big way.

This is what we reported earlier this week about diesel prices, which we all pay close attention to.

According to data released this week by the Department of Energy’s Energy Information Administration (EIA), diesel jumped up 5.3 cents to $4.157 per gallon, marking the fifth straight weekly gain. What’s more, prices have gone up a cumulative 23 cents during that period and 17.7 cents in the past three weeks alone.

This week’s price is the high point for diesel since checking in at $4.207 per gallon the week of August 18, 2008, and it tops the previous recent high of $4.116 from the week of October 22.

The average price per gallon is up 19.7 cents compared to a year ago at this time.

None of those facts are fun to report, but they could not be in our face any more than they already are. And the longer it goes on for, the more price increases in goods we will see, not to mention freight rates. We have seen it happen before, and we know the drill all too well at this point.

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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